Starbucks

A company once thought of as being on the cutting edge of the coffee industry is taking a step back, to handle increased competition from unlikely rivals.

Recently, companies like McDonalds have noticed how much customers seem to enjoy "high profile" coffee blends such as the ones that they are used to buying from places like Starbucks. In response to this, McDonalds released their own premium blend of coffee, as did places like Dunkin' Donuts. This has spelled trouble for Starbucks. Whereas they used to be perceived as expensive but high quality, seeing the cheap high quality alternatives from places like Dunkin and McDonalds has started to erode their market share. People are choosing the convenience and price of places like McDonalds and Dunkin over the high quality, expensive coffee at Starbucks.

Faced with this competition, Starbucks recently announced that they would be adding a new blend, called "Pike Place Roast," that more closely mimics the McDonalds and Dunkin offerings. This, they hope, will bring back some of their customers that they have recently lost in the coffee wars to McDonalds and Dunkin. Interestingly, though, is going to be how customers will perceive the coffee blend being sold at Starbucks, and whether it will actually help their business. In the past, Starbucks blends have been considered a bit bitter and strong by their customers, but customers began to see this as a sign of quality. The Pike Place Roast is lighter in flavor, mimicking cheaper blends of coffee, which I believe will begin to erode Starbucks' image as the highest quality establishment. In the end, this could be a very risky move for the company, and one that could hurt their brand and long term profit potential.